Yup. Let me quote Stigler once more; he contrasts his position to Richard Posner’s emphasis on [monetary] wealth-maximization: “The Posnerian theory would say that the sugar program is grotesquely inefficient because it fails to maximize national income. Maximum national income, however, is not the only goal of our nation, as judged by the policies adopted by our government—and government’s goals as revealed by actual practice are more authoritative than those pronounced by professors of law or economics.” In effect, whereas Posner only considers common law efficient, Stigler includes statute law, as well.
Do you recognize a difference between voluntary and involuntary transactions?
first, it certainly seems like it serves as a good starting point for analyzing political change. for example, all the histories i’ve read of the french revolution (all 2 of them) have described the causes for the revolution in terms of the excesses of the monarchy. but, if you think about it, the royal family had always lived extravagant lifestyles at the expense of their subjects and they had not to revolution before. what changed? i imagine stigler would argue that either the perceived costs of revolution fell or the perceived benefits of revolution increased such that keeping the monarchy was no longer efficient.
The quotes by Stigler have certainly piqued my interest in the man. I do agree that the method brought up is an excellent way to look at political change. I also agree the way he uses “efficient” is accurate, and the best use of the word for the way “political change” is being used. I think what I am trying to say is that “efficient” can and ought be used as a tautology when looking at long term goals that can be clearly assessed (for example a business projection). I also think this can be stated when looking at “inefficient” government stability.
I think I am also stating that when using the words “desirable”/ “undesirable” in a period of government stability there is a major inherent cognitive dissonance that goes along with the civilians in relation to modern governments when goals of inefficiency (in my sense of the word) and undesirability can be looked at from subject to subject due to the ghosts in the machines inherent in such a culture and due to the inherent structure of the government at “self promotion” and aggrandizement. That is not to say “social indicators” of “ineffeciency” (in the Stigler sense) in these governments won’t occur regardless; be it the citizens of the European PIGS, Tea Partiers, or whatever it is just to say that tautologies of the word “ineffecient” for USSR breadlines or your local grocery store, for example, could be set up in a reasonable, productive, and perhaps neccasary use to make meaningful analysis and projections of situations.
And to be clear, yes an “anti-revolutionary” stance must be taken in favor of a more “natural” evolution of society both for calculation and analytic purposes and personal aesthetic (too bloody/insane for my tastes). But tautologies can be asserted (in fact they have to be to have achieve practical dialogue), and I think in terms of critiquing modern governments that have been stable and how it causes “inefficiencies” it is appropriate. It isn’t a call for revolution, it is a useful tool for analyzing social behaviour.
“Yup. Let me quote Stigler once more; he contrasts his position to Richard Posner’s emphasis on [monetary] wealth-maximization: “The Posnerian theory would say that the sugar program is grotesquely inefficient because it fails to maximize national income. Maximum national income, however, is not the only goal of our nation, as judged by the policies adopted by our government—and government’s goals as revealed by actual practice are more authoritative than those pronounced by professors of law or economics.” In effect, whereas Posner only considers common law efficient, Stigler includes statute law, as well.”
Thanks. Ok. Let me see if I can successfully incorporate efficiency into your argument.
Again, here’s your argument WITHOUT efficiency considered:
(1) individuals are rational
(2) therefore, individuals act to achieve ends
(3) social institutions are the result of individuals’ actions
(4) therefore, social institutions serve the ends of individuals
Now, with efficiency…
(1) resources are scarce
(2) individuals are rational
(3) therefore, individuals act to achieve ends—and do so in a way which maximizes (or at the very least, aims to maximize) efficiency
(4) social institutions are the result of individuals’ actions
(5) therefore, social institutions serve the ends of individuals—and do so in a way which maximizes (or at the very least, aims to maximize*) efficiency
- In the long run, it is fair to say that the aim of maximizing efficiency is reached—therefore, it is fair to say that social institutions actually DO maximize efficiency.
Would you say this is basically a fair characterization of your argument?
Michael,
I guess there’s no such thing as “long enough”, as everything must cease to exist at some point –
except change, that is. (As I mentioned before, I too didn’t like the term “efficient”, hence the scare
quotes.) So change is characterized by maximal “efficiency” as it seems to be the most persistent
phenomenon out there. Just developing my thought here, but if action involves using means toward achieving ends, and ends – by definition – must be out there (i.e. not presently realized or existent), then the existing (means) reality is always less efficient than the future (ends) reality, lest no action (change, life) occurs.
I guess there’s no such thing as “long enough”, as everything must cease to exist at some point – except change, that is. (As I mentioned before, I too didn’t like the term “efficient”, hence the scare quotes.)
Just developing my thought here… If action involves using means toward achieving ends, and ends – by definition – must be “out there” (i.e. not presently realized, or existent), then the existing (means) reality is always subjectively perceived to be less “efficient” than the future (ends) reality, lest no action (change, life) occurs! From this angle, human history is a dynamic present->future (means->ends) journey toward increasing “efficiency”. Phenomena that persist through this dynamic longer could be called “efficient” as, cumulatively, they are manifestations of more desired ends and of past actions toward achieving them.
Present market prices reflect the subjective valuations and actions (past ends) of market agents. More generally, present reality (what exists) reflects the subjective valuations and actions (past ends) of human actors, as well.
Z.
I guess there’s no such thing as “long enough”, as everything must cease to exist at some point –
except change, that is. (As I mentioned before, I too didn’t like the term “efficient”, hence the scare
quotes.) So change is characterized by maximal “efficiency” as it seems to be the most persistent
phenomenon out there. Just developing my thought here, but if action involves using means toward achieving ends, and ends – by definition – must be out there (i.e. not presently realized or existent), then the existing (means) reality is always less efficient than the future (ends) reality, lest no action (change, life) occurs.
Nicely said, z1235.
And, thanks for the systemization, bcyclwutztht; I think you got it right.
@Strangeloop. Thanks for the clarifications. Now that the form of your argument is clear, we can work more succinctly with its content.
(I) re: Premise (4) “social institutions are the result of individuals’ actions”
You’ve stated previously in this thread that
(1)
and later
(2)
Part of the confusion people are having, I think, is that your use of this specific terminology indicates that you would liken all social institutions (i.e. those which have persisted through time) to those desribed by Mises as resulting from “spontaneous order”. But, Mises has a very specific theoretical conception of these “spontaneous order” institutions, and would not assent to your application of the conception to all persisting social institutions—only to language, common law, and those institutions associated with free markets: commodity money, the division of labor, market exchange, etc.
To reconcile this confusion, I think you have two choices: (1) provide your own rigorously analyitical conception of “spontaneous order” and such phraseology as “self-organizing natural processes”; or (2) concede to Mises exclusive use of this phraseology, and use a phraseology which avoids such connotations. Otherwise, any further talk of “spontaneously occuring”, “naturally occuring”, “spontanously organized”, or “naturally organized” or some such will only foster confusion.
How else would these “other” social institutions come to exist (and persist) if not spontaneously from within the universe of human actors?
Z.
As asked before: ‘effecient’ for whom? While there are criticisms possible on Rothbard’s paper ‘towards a reconstruction of utility and welfare economics’, it is true that if we perceive people to ‘maximize’ ex ante benefit, than it’s true that coercive intervention changes the way people can act in the world. It’s obviously efficient for the person who conducts the action, but it’s not for the person who undergoes the action. It’s true that this vision rests on an underlining distinction between ‘coercive’ and ‘voluntary’; but these are economic relationships, not moral ones per se.
What you’re basically saying is: ‘whatever the fuck happens, is good from an economic point of view’. At least we know that there is no market failure. Thank God!
Incidentally; this is also pretty awesome. We never have to hear any policy suggestion ever again from any neo classical! It’s all efficient!
Well; if anything, at least the theory has value by sheer virtue of that consequence.
@Z
In order to investigate these matters—indeed any matter—one must define one’s terms and clarify one’s conceptions. Otherwise, mutual understanding or advancement of knowledge among participants—the ostensible goal of the entire enterprise—is doomed from the jump. StrangeLoop is using terminology in his analysis which has been previously defined by Mises to be something quite analytically specific.
All I’m saying is that (1) StrangeLoop needs to be congizant of this fact; and (2) StrangeLoop needs to proceed accordingly to avoid confusion.
May I get an answer to this please? Doesn’t your theory lead you to conclude that everything is efficient?
He starts explaining why people tolerate the existence of a State here, beginning around 2:00. It goes until the next video here where he begins explaining the theory I mentioned around 5:00. The whole lecture is very powerful and worth listening to from the beginning.
I don’t think Hoppe is wrong per se, but I think the theory he is propounding may only be applicable to explaining the decline of feudalism and the rise of absolute monarchy. I don’t think this theory can be generalized to explain the earliest origins of the State in human social evolution.
Clayton -
Quoting Stigler, "In this latter view, every durable social institution or practice is efficient, or it would not persist over time. New and experimental institutions or practices will rise to challenge the existing systems. Often the new challenges will prove to be inefficient or even counterproductive, but occasionally they will succeed in replacing the older system. Tested institutions and practices found wanting will not survive in a world of rational people. To believe the opposite is to assume that the goals are not desirable: who would defend a costly practice that produces nothing?
So I would argue that all durable social institutions, including common and statute laws, must be efficient."
Essentially, Stigler has broadened our viewpoint: instead of morally isolating the government as separate from the spontaneous self-ordering of society, the government (its statute laws, etc.) must be understood as the product of rational individuals and must be understood as a social outcome wherein inefficiencies are doomed to perish. Rather than, as Hayek did, view the government as the foundation for a spontaneous order, Stigler is asserting that there is a social continuum: all institutions have arisen by the same actors behaving rationally and self-interestedly.
On a serious note : http://mises.org/journals/jls/16_4/16_4_4.pdf
As a whimsical aside http://blog.mises.org/8311/stigler-the-irrational-anecdote-by-van-dun/
Nir, thanks for the DiLorenzo paper. I enjoyed reading it.
My thoughts are still developing (simmering) as there are compelling arguments from both sides of the debate. Theory (reason, logic) is a useful tool in predicting reality (what social phenomena have existed, now exist, and will exist in the future) but those predictions will only be as good as the model of the human actor plugged into them. A sadistic dictatorship may end up being the most “efficient” and most enduring social institution in a society of masochist human actors. I read somewhere that everyone gets what they want. If they don’t have what they think they want, it’s usually because they don’t really want t.
Varying human actor models come with varying cost/benefit, risk/reward parameters for deciding on their end-achieving action. The sadistic dictator probably wouldn’t last a day in a society of liberty-loving individualists. To me, phenomena that exist and endure contain valuable information about actual human actors. A theoretician would be well advised to peruse this information when choosing his human actor model lest he ends up proposing “efficient” but untenable Utopias.
Z.
I defend that the state is efficient at what is vital for it’s survival. For example, in 1984, everything sucks, except the ultra efficient Ministry of Love, even the lightbulbs and cleaness of the place are well kept.
Here in Brazil, our equivalent of the IRS is extremely efficient at finding things to steal our money. Like “you didn’t declare those 20 shirts you company made 20 years ago!”.
And he has narrowed our minds. The basis of his argument is a logical fallacy.
(1) If efficiency, then persistence.
(2) Persistence.
(3) Therefore, efficiency.
He’s affirming the consequent. This is incorrect, because while efficiency is a sufficient condition for persistence, persistence can occur with or without efficiency. This might also be an example of the fallacy of composition: i.e. the assumption that what is true of the parts NECESSARILY is true of the whole.
The only escape from this latter conondrum would be the reliance upon the idea of “spontanously ordered” social institutions, PROPERLY UNDERSTOOD.
This proper understanding would necessarily be rooted in the actions of individuals, and the institution would necessarily and DIRECTLY serve the ends of EACH INDIVIDUAL in the order IMMEDIATELY when called upon by the individual to do so: e.g. common law, commodity money, free market exchange.
For instance, if one has been legally aggrieved, he/she can seek immediately relief in a court of law if need be. Likewise, if one wishes to obtain some necessary or desired product, one can go immediately to the marketplace.
Further, a truly spontaneous order is one which is created, through individual action (to be sure), but without the intention of creating the order or institution. A NON-spontaneous order may also be created through individual action, but is the product NOT of the UNWITTING accretion of individual actions, but the WILLFUL creation of a group of individuals, consciously choosing and creating the institution AS A GROUP and WITH ONE VOICE, at ONE PARTICULAR TIME, and in ONE PARTICULAR PLACE.
And I would be ASTOUNDED if Hayek views government as a spontanous order.
Edit: Scratch that re: Hayek. I misread your post.
Not if “persistent existence = efficiency” is viewed as a tautology, as mentioned before. At the minimum, persistent existence of X is a manifestation of X’s efficiency in the act of existing. X’s efficiency is not only sufficient but necessary for X’s persistent existence which is the ultimate manifestation of (and a “reward” for) being efficient. Any persistent human institution (sex, marriage, private property, law, religion, government, respect, golden rule, etc.) must be “efficient” toward achieving some human actor’s ends, while some less persistent ones (murder, rape, throwing bricks at other people, etc.) probably comparatively much less so.
Z.
Exactly. As another poster asked early on… the government is efficient at what? The end of any political activity is parasitic subsistence and at this, government is tremendously efficient. Governments are in a competitive market of parasitic subsistence which forces them to continually improve their methods of parasitism or face extinction by revolution, coup, overthrow, foreign invasion or infiltration and subversion by foreign powers. Those governments which have survived longest are “most fit” at parasitic subsistence… they are the fittest to survive. The problem is when we begin to investigate the efficiency of government in terms of its advertised ends as opposed to its evolutionary end.
The motivating reason that government exists is the disutility of labor and the natural impulse to avoid it. There is no deeper or more transcendental reason that governments exist. They exist because it is a greater satisfaction of one’s wants to consume without laboring* than to consume in exchange for laboring. Government is a means for those who control it to transcend the limits of private property to which the rest of us are naturally subject.
Clayton -
*Where “laboring” is defined sufficiently broadly to include any private, non-coercive endeavor however superficially “leisurely” it may be, such as commodity speculation or even gambling